BARGAIN OR BURDEN:
For others, care’s not that affordable
Costs vary widely for people in same insurance pool.
The Affordable Care Act’s fundamental changes in how health insurers provide coverage for individuals have put September Young and Howard Stovall in the same pool for pricing health insurance, with very different results.
It’s been a boon for Young, a 58-year-old Memphis hair stylist whose insurance was too expensive to use before but now costs $2 a month with a federal subsidy for her premiums. She’s taking care of health problems put off for years.
Stovall, a 52-yearold managing partner of a Memphis entertainment and services company, earns too much to qualify for any federal subsidy. He pays full price for insurance that he said had an enormous jump two years ago, and he’s been told to expect another 35 percent increase in January.
Tennessee’s dominant health insurer, Chattanooga-based BlueCross BlueShield of Tennessee, points to unexpectedly high costs of care triggered by changes
in the individual health insurance market as the major factor in proposed rate hikes.
BlueCross lost $141 million in the first year of the unprecedented “single risk pool” for individual coverage, company officials said.
Insurance rates set for an insurer’s customers on the federal Healthcare.gov marketplace — where about eight in 10 received federal subsidies — are the same for those who buy from traditional sources “off” the marketplace.
The health law, also known as Obamacare, since 2014 has required insurers to issue coverage to anyone, regardless of pre-existing conditions, health status or other factors. It limited their previous ability to base higher rates on factors such as age. That made higher costs and rate increases expected in the individual market. The Society of Actuaries in 2013 predicted that monthly insurance costs would jump about 45 percent by 2016-17.
Last year, BlueCross raised rates 19 percent, said Roy Vaughn, BlueCross vice president of corporate communications. For 2016, the insurer has filed with state and federal regulators a request for a 36 percent rate increase. That would range from hikes of about 19 percent to 60 percent, not including those allowed for aging.
The insurance rates for small group and larger employers are not being roiled by dramatic changes.
Currently, BlueCross has about 23,600 individual insurance customers in Shelby County, the company reports. Of those, about 16,000 purchased on the federal marketplace and about 7,600 did not.
The company reports that 3 percent of those customers drove more than 50 percent of the costs. Those with multiple and chronic conditions are examples, Vaughn said.
“The entire pool needs to cover the cost of that 3 percent,” he said.
Roughly half of those who purchased coverage through the federal marketplace were previously uninsured, he said. Younger, and therefore healthier, people aren’t buying in the numbers hoped for.
“It’s the young ‘invincibles’ that aren’t signing up still,” Vaughn said.
Young said pre-existing conditions previously kept her from getting anything but a $400-amonth policy that required paying a $5,000 deductible. Income-based subsidies through the federal marketplace, which a U.S. Supreme Court last week ruled will continue flowing in Tennessee, now cover all but $2 of her monthly premium.
She said she’s been catching up on getting care for conditions she put off, including knee and other problems that may have developed because she couldn’t afford $500 shoe inserts a podiatrist prescribed, she said.
“That’s the bad part, when you have to keep putting off stuff because you can’t afford it,” Young said. She called her subsidized health plan “almost too good to be true.”
Stovall said that getting extended vision and dental coverage for his 15and 16-year-old children has been a benefit, but the escalating costs have him looking for a better deal and thinking of more health care reforms.
“If you’re living a healthy life and you’re paying attention to your expenses, you shouldn’t have a one-third jump in your health insurance,” Stovall said.